Public Bill Committee

[Jim Sheridan in the Chair]

Jim Sheridan: Welcome to the afternoon sitting of this Bill Committee. I am happy to carry on the procedure that Philip Hollobone started the day with. Rather than having brief questions, people can just catch my eye if they wish to ask a question. Is that acceptable?

Kate Green: On a point of order, Mr Sheridan. I just wanted to express my surprise that the final evidence session with witnesses this afternoon is due to end at 5.40 pm. My understanding is that normally afternoon sittings on a Tuesday run until 7 o’clock. Given that we have already expressed concerns this morning about the very limited time available to take evidence from some witnesses, I am surprised that we will be finishing early this afternoon. I wonder whether that was fixed this morning.

Jim Sheridan: I imagine that it is too late at this stage to extend the hearing, but certainly that is something that we can take on board for future meetings. Unfortunately, the programme motion has been agreed, Kate, but I share your concern.
Okay, colleagues. Any other questions before we move on? Given the warm weather, please feel free to take your jackets off if you feel that that is necessary.

Examination of Witnesses

Linda Lee, Peter Lodder, Deborah Turner, Claire Fazan gave evidence.

Jim Sheridan: Thank you very much for coming along. We will now hear oral evidence from the Law Society, the Bar Council, the Family Mediation Council and Leigh Day and Co Solicitors.
For the record, would you please introduce yourselves to the Committee?

Linda Lee:  My name is Linda Lee. I am president of the Law Society.

Peter Lodder:  My name is Peter Lodder. I am the chairman of the Bar Council.

Claire Fazan:  My name is Claire Fazan. I am a partner in the firm of Leigh Day and Co.

Jim Sheridan: I am having some difficulty hearing. I do not know if it is the acoustics. If witnesses can speak a bit louder in future, that would be extremely helpful.
Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick strictly to the timings in the programme motion, which the Committee has already agreed. I sincerely hope I do not have to interrupt people in mid-sentence but I will if need be.

Q 7878

Yvonne Fovargue: The Bar Council has today issued a report that said the measure is do-it-yourself justice. What impact will there be on courts and the numbers of litigants in person? What about vulnerable people who cannot represent themselves?

Peter Lodder:  We have indeed made such a statement because what I hear from young family barristers is the danger of serious damage to the safety net for children, vulnerable people and hard-working families. What I hear from judges in already busy court centres is the significant risk that those people, who will now be forced to conduct their own cases—in other words litigants in person—will clog up the courts and dramatically increase the cost of the system. In our view, this is a serious and worrying prospect, particularly because among the wide group I speak to—not just other members of the Bar but judges, interest groups and members of the public who write because they share our concern for the interest of justice—there is huge scepticism that any savings will result from these cuts. Vulnerable people’s positions are going to be compromised. People are going to be forced into a position where they have to act on their own behalf in alien surroundings under conditions of great stress and we think it will cost more.

Linda Lee:  It should not be forgotten that these cost proposals will also impact on middle England. You will see a group of people who have hitherto had access to the courts, denied access because they will not have assistance. Anybody faced with a difficult and complex case to bring will have difficulty dealing with that themselves.

Jim Sheridan: Before calling the next Member, I believe we have been joined by the Family Mediation Council. For the record, could you introduce yourself?

Deborah Turner:  I am Deborah Turner, Convenor of the Family Mediation Council, which is a council of the professional bodies for family mediators.

Q 79

Robert Buckland: My question is to Peter Lodder primarily, but Linda may be able to help as well. I declare an interest as a criminal legal aid practitioner until the election. It has been suggested by some quarters, including the Labour party, that more savings could be made in the field of criminal legal aid. We come to the Bill after many years of retrenchment in criminal legal aid. What do you say to the proposition that more cuts can be made in that area?

Peter Lodder:  Let us look back to the last day of the previous Administration. I am not in the business of putting one party against the other, but on the final day of the previous Administration, criminal advocacy fees were cut by statutory instrument by 4.5% successively over three years—a total of 13.5%. On top of that cut, there are many cuts here, which will see, for example, the fees paid in murder and manslaughter cases being cut by yet another 25%, so we are talking about nearly 40% worth of cuts over very few years. This is against a background of no rise in fee income for in excess of 15 years, because fees have been frozen over that period. I am not pleading for more money but I am saying that you are cutting us a lot already.

Linda Lee:  It is well known that we have put forward a raft of alternative proposals. We invite the Government again to look at those proposals, and perhaps in more depth than previously. We agree that savings have to be made but we think savings can be made without impacting directly on the vulnerable. I think Peter would agree with me that our concern is not really about the lawyers involved in this. A very tiny percentage of solicitors in England and Wales are now involved in legal aid work. We are interested in the impact on clients who need help. I think we can say we are united on that point.

Q 80

Karl Turner: I have to say to the panel that I have had longer to cross-examine witnesses on a simple road traffic offence—someone parking on the zig-zags—than I have to take evidence from you today. I will try to be quick, now I have made that point.
I have some concerns about the definition of domestic violence in the Bill. Could you help me with the impact that that will have from a practitioner’s point of view?

Peter Lodder:  We have suggested that the definition used by the Association of Chief Police Officers—clearly an authoritative definition—is the one that should be used. The Government have chosen not to do so. They have chosen what appears to be a narrower definition. Obviously, we do not know exactly what that will mean, save that it must be that fewer people will fall within the definition, and therefore fewer people will be eligible for what little legal aid is left.
The problem is further increased by the fact that now, in the absence of domestic violence, people will not get legal aid. If a client presents at a solicitor’s office on the back of a matrimonial dispute, and is asked whether there is any evidence of domestic violence, and they are aware of the fact that that is the only way that they will get legal aid, there is a strong incentive to say that there is indeed violence.
The problem compounds. If that allegation is made it must be investigated, and that will bring in other authorities, at greater expense. In addition, assuming for the moment that it is a false allegation, although the person making the allegation will get legal aid, the alleged perpetrator will not. In court, someone who may be facing a false allegation will have to defend himself—it will probably be himself—and will risk losing everything: children, liberty, home, you name it. They will have to defend themselves in that circumstance. We do not see how that can possibly advance access to justice.

Linda Lee:  I do not need to add anything from a practitioner point of view, but as you well know from the Government’s impact assessment, this will mean not bringing huge numbers of cases, which should properly be brought in to protect—in the majority of cases—women and children. All the proposals have a disproportionate impact on women and children, and this is a particular example.

Q 81

Ben Gummer: It is a pleasure to serve under your chairmanship for the first time, Mr Sheridan.
Mr Lodder, how many barristers travel first-class on the railway?

Peter Lodder:  I have no statistics, but I can tell you I do not.

Q 82

Ben Gummer: You have never heard of any travelling first-class and charging it to the taxpayer?

Peter Lodder:  No.

Q 83

Ben Gummer: What would you say to the suggestion that £10 million can be saved by limiting all but essential advocates’ travel to court and hotel expenses, and no longer paying for first-class travel?

Peter Lodder:  I have already said that I do not know to what extent that is used. I doubt very much that it is.

Q 84

Ben Gummer: That is the suggestion of your neighbour, in her cost savings. What do you say to capping fees?

Peter Lodder:  I think it is a slightly unproductive process to invite me to enter into a battle—

Q 85

Ben Gummer: You have just said you were united, so I just want to check the degree of union. What about capping fees at £250,000; do you support that as an idea?

Peter Lodder:  Forgive me, I do not want to appear to be arguing with you, and I certainly do not want to appear to be arguing with Linda Lee. The point is that we are united in asserting that the proposals that the Government have set down in the Bill are deeply harmful to justice. If you want to trim around the edge on travel costs and the like you might find it a profitable line of inquiry. Personally, I would not. We know what we agree on, and we agree on the fundamentals.

Q 86

Ben Gummer: I just want to explore the Law Society’s other savings, which they have been trumpeting. As far as I can make out, about £42 million comes from the Bar, which is already under considerable pressure in criminal and family cases. Is that something that you have discussed with the Law Society?

Peter Lodder:  I know what they have said. I do not particularly agree, but I am not going to have that spat publicly here.

Ben Gummer: That is £42 million that the Law Society proposes—

Peter Lodder:  I do not accept what they said, but I am not in a position to argue it here.

Linda Lee:  Perhaps I could help. We have relied on information provided by the Legal Services Commission and I think your question is probably more properly directed at them.

Ben Gummer: It is not. I just wanted to check what the Bar thought of your proposals to trim £42 million from their fees.

Q 87

Kate Green: I want to ask a question specifically of Claire Fazan from Leigh Day about the impacts that you think the reforms will have on civil litigation on cases such as Trafigura, which, very famously, your firm pursued. I wonder whether it would be helpful, for the benefit of the Committee, if you explained a little of the background to the case as well.

Claire Fazan:  I am sorry. There has been a misunderstanding. I am a clinical negligence specialist. That is my area of expertise. I am afraid that that is the area on which I have come prepared to answer questions.

Q 88

Kate Green: Is anyone else able to comment on that case, or on the impact of civil litigation generally?

Claire Fazan:  I can talk very vaguely about it as a person within the firm but, as I say, I have not come prepared because I understood that this was going to be about clinical negligence, which is my area of expertise. What I can say is that it will make it very difficult indeed for the big group cases to be run where it is expected that costs are going to come out of compensation, and where there is a proposal that there is not going to be any insurance. Beyond that, it is slightly difficult for me to go into any further detail without a bit of further preparation.

Linda Lee:  I could answer in general terms. In general terms, these types of litigation are being hit twofold. On the one hand, the availability of public funding will be gone. On the other hand, running cases on a no win, no fee agreement for risky, difficult or complex cases will become increasingly difficult and unlikely to occur. That is our broad position on all types of litigation. That will impact on a whole range of people.

Q 89

Ben Wallace: I want to try and explore the effects of the impact of the success fee. On Trafigura, my understanding is that the legal costs for that case were £100 million.

Claire Fazan:  I am sorry. I have come prepared to deal with clinical negligence.

Q 90

Ben Wallace: I can tell you the facts, if you want, about the costs, because I would like your view on the success fee, which is relevant both to clinical negligence and other parts of the law.

Claire Fazan:  I am happy to talk about success fees in clinical negligence cases.

Ben Wallace: But the success fee is a more general concept; it is not just confined to clinical negligence. It is about whether you think the success fee is a principle that needs reforming, as Lord Justice Rupert Jackson’s review tried to change. The legal fees for Trafigura were £100 million; the awards were £30 million. In the Naomi Campbell case with The Mirror, her awards for damages were £3,500 and the legal fee award was £1.4 million. In both cases, the success fee made up nearly 50% of the legal costs. What is clear from the example of both cases is that the success fee, as in many other cases of success fee, is not shared with the claimant; it is shared by the lawyers to compensate them for failing cases elsewhere. That is the principle of the success fee as it was changed, the latest in 2003, to compensate them for other failing cases they might have elsewhere and to close the risk.

Karl Turner: Is there a question here?

Ben Wallace: Mr Turner, you were not here at the beginning of the sitting this morning, so if you listen you may learn something.

Jim Sheridan: Ben, carry on. Try and ask a question and get an answer.

Q 91

Ben Wallace: On the success fee issue, do you think that it is okay for defendants to pay excessive fees to compensate lawyers for non-performing cases they may or may not have against other defendants?

Claire Fazan:  I will deal with part of that. The crucial thing in terms of limiting the costs of civil litigation is dealing with litigation behaviour. The concept that has been proposed by many people in the context of these reforms is that there should be fixed success fees that are tied to stages of litigation, and which are designed to impact on litigation behaviour. Therefore, no success fee is payable in a case where during the pre-action protocol period there is an admission of liability. The defendant should not pay anything then. If there is an admission of liability at any stage up until the key trial preparation is being done, which is usually talked about as being about four weeks before trial, there should be a success fee, but not the sort of success fees that people are talking about in the press—100%. There should be a limited, structured, fixed success fee.
It is only when a case is litigated by defendants to trial or to immediately before trial because of delays in dealing with settlement of cases that the 100% success fee comes in. In the field of clinical negligence litigation that is a typical pattern. It is only at the last stage that admissions are made and cases are settled. Very few cases go to trial. They are settled very late in the day, regardless of how they are funded. It is in those cases that are taken in the very late stages or to trial where if a claimant succeeds in proving what would have been the subject of an admission, or is indeed the subject of a late admission, it is entirely proper that they should recover a success fee.

Linda Lee:  I agree entirely with Claire. What you have to remember is that it is very dangerous to look at one case and say, “That doesn’t sound right to me,” because you do not know all the circumstances of that case. The answer is that the court judges the circumstances of that case. On request of the paying party, the court can look at the bill, look at the success fee and decide whether or not that was appropriate. If the court feels that it was not appropriate, it marks it down. There is a test to establish whether or not it is a fair fee. The second thing is that you hear only about the cases where the defendant has lost and, as Claire said, they have chosen to pursue that claim to trial. You have to question why in many cases.

Jim Sheridan: Very briefly, Ben—and very brief answers as well.

Q 92

Ben Wallace: I understand that when a defendant loses, he pays compensation. He or she pays for their failure in whatever field. I am talking about the extra bit—the success fee—where that defendant pays for some other failing case elsewhere or to compensate the lawyer for taking on cases in other fields. I understand that the people culpable should pay for the mistake they make and that they should make reparations and so on. It is the extra bit I am concerned about. One of the big law firms described it on its website this morning as a “win bonus” that went to the lawyer. I do not see why that principle is fair.

Linda Lee:  The purpose of it is entirely because, as a solicitor, you take on a risk. If I were running a spread of clinical negligence cases, I would look at how much risk the firm could stand. If solicitors are to take on riskier cases, there has to be a fighting fund. Yes, you are right that that was the original principle, but the award is not simply about giving you a fighting fund; it is far more complex than that.
When you set up a conditional fee arrangement, you have to notify the other side that you have entered into it and provide information to the court, as I said, about how you arrived at that figure. You do not simply say, “I’d like 100% please.” You have to explain the risk and the levels of risk. Also, the defendant’s behaviour is looked at. The defendant has an opportunity to settle at earlier stages. They generally have the knowledge and information, and that opportunity. But the proposals in the civil costs part of the Bill say that the defendant should take no risk or responsibility for their behaviour and that instead it should be the injured person who does that because you are talking about not recovering that element from the defendant; you are talking about recovering it from the claimant. So the claimant does not get 100% compensation for the injury they have suffered.

Jim Sheridan: We may return to that issue if time allows.

Q 93

Dave Watts: I think it is generally accepted that the Government’s proposals will reduce the scope and the number of people who will be eligible for legal aid in the future. That will leave a gap in the justice system, which the Government seem to think they can fill through mediation—at least, one of the mechanisms is mediation. First, are there enough mediators around to do this? Secondly, in your view is mediation a substitute for court action?

Linda Lee:  I will answer first and then I think Deborah should come in after me. Mediation is a very good tool in any litigator’s armoury. The point about mediation is that it has to be used at the right stage, in the right case, in the right way. You cannot simply say, “It is day three, we will now apply mediation or it doesn’t work.” The most successful mediations, as with the most successful court actions, are where the parties have been properly prepared. The issues have been narrowed down and time is saved so people are ready to settle. I think Deborah will talk about numbers of mediators.

Deborah Turner:  I can talk only about family mediation, in which numbers are increasing. There is a potential problem about capacity, there is no point pretending that there is not. The pre-application protocol, which came into force in April requiring privately funded parties to attend an assessment meeting, has meant there is a good deal of training going on at the moment. Numbers are increasing.

Q 94

Dave Watts: What will happen in cases where they have been referred for mediation and that mediation fails? How do you end the process?

Deborah Turner:  On the subject of family mediation, if the mediation fails, it breaks down. Normally what would have happened was that the parties would return to their solicitors, but there is going to be a void and it is a great worry. We are worried it will put undue pressure on mediators to keep mediations going after they have actually ceased to be sustainable, and also pressure on assessing the unsuitable as suitable in the beginning, because we are very well aware that parties are going to have no where else to go.

Peter Lodder:  There is a very important point here. Mediation is available to people who come to it with a desire to mediate. The current situation is that they have to go through that process, but they approach it having been advised and with the support of the advice given, knowing what that process is about. They are much more likely to engage upon that basis. Where they are told that they must go into it and they do not have the support of any structure around them, they go into an alien environment, forced to do something that at least one party will not want to do. That will simply inflame the situation, which then spills out the other side, into litigation. Under these proposals, that litigation will also not be supported, and so you have people—who tend to be at one of the most stressful points in their lives and therefore pretty unlikely to accommodate the needs of the person causing that stress—in face-to-face contact with no one between them and no safely consensual outcome.

Claire Fazan:  In my field of clinical negligence, we have a requirement from the court that there is alternative dispute resolution at a particular stage in the case. The vast majority of clinical negligence cases that are settled after the pre-action process, which is before you have actually issued proceedings, are settled through an alternative dispute resolution process, whether formal mediation or another form of mediation between lawyers. That is incredibly useful but it can only be done when all the evidence is available to everybody, which is inevitably at a later stage in the case. It is litigation that leads to mediation or alternative dispute resolution.

Linda Lee:  The problem is that there will be nowhere for these people to go, and the cost will be picked up by other agencies downstream. There will also be a social cost and that is unavoidable.

Deborah Turner:  May I add that we feel there is a very real danger that those cases which cannot be resolved in family mediation and have nowhere else to go, will end up in court and you will have some very, very stressed-out litigants in person?

Q 95

Elizabeth Truss: I want to return to the issue of the scope of legal aid. Is it not the case that in other countries with similar legal systems, such as Canada, New Zealand and Australia, there are much lower costs per head of legal aid, the scope is much narrower, and the eligibility for legal aid is much lower. My understanding is that at roughly £10,000 income you do not receive legal aid in those countries. Is the British system not pretty generous in terms of the eligibility for legal aid and the scope that is being proposed under this Bill?

Linda Lee:  No.

Q 96

Elizabeth Truss: Could you comment on those specific countries please?

Linda Lee:  Yes, I certainly can. We have made our views on this matter quite public. A lot of the jurisdictions referred to do not use an adversarial system; they use an inquisitorial system.

Q 97

Elizabeth Truss: I just mentioned three that do use an adversarial system.

Linda Lee:  I will come to those, but first I will tackle things one by one. Inquisitorial systems spread the cost elsewhere—

Q 98

Elizabeth Truss: Excuse me, but I did not ask that question.

Linda Lee:  If you are comparing New Zealand, I think that the figure that you have quoted is £8 per head. We know that figure is vastly out of date and the cost is probably at least double that now. But you are talking about a rural population of approximately 4,000 people and you are comparing that with the problems that we have here. If you look at France and you look at the figures that we have—

Q 99

Elizabeth Truss: I did not mention France. I asked you specifically about the income eligibility in New Zealand and Canada. Could you answer that question?

Linda Lee:  What you are looking at are totally different social circumstances and you are not comparing like with like.

Q 100

Elizabeth Truss: Can you tell me what the income threshold is in those countries?

Linda Lee:  I will be happy to provide it in writing after this meeting. I do not have that information now.

Q 101

Elizabeth Truss: May I put it to you that the Law Society has not actually studied those systems and how they work?

Linda Lee:  We have studied those systems and we have provided that information in detail in the past, but we will resupply it to this Committee happily. I also draw your attention to the Foundation for Change document about British Columbia, where similar proposals were enacted and changes were made to legal aid; the document talks about the impact that those proposals have had on the system there. I will send you copies of that document also.

Q 102

Elizabeth Truss: Do you know the income threshold for British Columbia?

Linda Lee:  No, I do not, but I am happy to provide it.

Q 103

Elizabeth Truss: I have looked at the Canadian system and I believe that most of the provinces in Canada have an income threshold of about £10,000 a head.

Linda Lee:  And what are the average earnings? And what are the other social circumstances that you are talking about?

Q 104

Elizabeth Truss: When you look at the British system, where you can get legal aid on incomes up to about £30,000, you see there is a vast difference.

Linda Lee:  The threshold of no contribution is income support level; it is a very low level in this country. There are contributions on a sliding scale, going up, and I doubt the figure of £30,000, unless you have a huge family. The fee structure is a complex system. We will be happy to supply you with information about it and any other information that you want, but you are not comparing like with like and you are not looking at the facts of what you are actually doing here, because you will have an impact here that—it makes no sense. Do not use figures that do not compare. It is a wrong way to justify your position.

Q 105

Elizabeth Truss: It seems to me that I have put figures to you and you have not put alternative figures for those other countries.

Linda Lee:  I do not think that you really expected me to come with the means test for every country in the world to this hearing.

Jim Sheridan: But you will provide the figures.

Q 106

Elizabeth Truss: I would expect, given that those countries are the closest comparators to the British system, that you would have the figures.

Linda Lee:  I will provide them.

Q 107

Elfyn Llwyd: I think that we might need some mediation in this Committee before long.
Can I take the witnesses back to clinical negligence, which I am interested in? I declare an interest having practised in family and criminal law for many years, both as a solicitor and a member of the Bar. In particular, I am interested in the removal of a civil aid certificate where clinical negligence has occurred in very serious cases. I know that the Government have rowed back slightly and said that there will be some cover for initial medical reports, which I appreciate are crucial. Overall, what is your view on that? I am asking Ms Fazan to begin with.

Claire Fazan:  First, I am not quite clear what the rowing back is. There appears to be a suggestion that there will be some prescribed cases that may fall into exceptional funding, but it is very unclear what the requirement for that will be.
Moving on, let me talk about the profoundly brain-injured children cases, because people have an assumption that it is very easy for somebody who specialises in the field to know the minute that somebody walks into their office that there is a claim that can be won. I wish that was the case. I can only think of one case in 24 years where I have been confident. The reason is that the claimant has to prove the case; the information is in the hands of the health providers, both in terms of documents and witness evidence; and witness evidence is not available until well into litigation, by which time you have had to say what your case is.
Most often, I am faced with unsophisticated people—by which I mean people who are not professionally medically trained—who know they have a baby who, shortly after being born, they have been told is unwell. Imaging shows that the brain is injured, but they do not know why. In order to work out whether that is the result of negligence, I need a midwifery expert and an obstetric expert. To know whether the negligence would have avoided the injury I would need a paediatric neurologist. I may have to organise brain imaging. I will need a neuroradiologist, a foetal-maternal expert and quite often I will need other people such as geneticists. Only when I have all that information can I say to my clients, “You have a case, which I think has reasonable—not certain—prospects of succeeding”. That is going to be very difficult for families who are devastated and who put all savings and family plans on hold: often they will not have further children because they cannot risk the thought of coping with other children. They are then going to have to find lawyers who will say, “We can take on this case” knowing that at this stage we have no idea whether we can win it. We also have no idea how we are going to fund the cost of these reports. There may be some sort of after-the- event insurance which may pay for it at the end of the day, but how is it going to be paid along the way? Those are big costs for lawyers to carry. We know from the impact assessment that small firms are not going to be around to carry these. They are going to be difficult for any firm to carry in any sort of number. I am afraid the answer is going to be reduced access for justice for the most vulnerable people within our society.

Linda Lee:  Clinical negligence litigation plays an important role. In an ideal world this would not be the case, but it does impact on patient safety. With less cases being brought, which we think is fairly apparent from the proposals both to remove legal aid from scope—other than exceptional cases and we do not know what these will be—and the Jackson proposals, which will stop a large number of clinical negligence cases being brought but probably will not impact on smaller-value road traffic claims, one will see a corresponding drop in probity and consideration of problems arising from medical accidents. That is vital to society and to improve patient care.

Peter Lodder:  It is important to note that when Lord Justice Jackson produced his report, he envisaged that there would be a legal aid safety net. Conditional fee agreements came in because of the withdrawal of legal aid. If conditional fee agreements are then taken out—or at least reduced to the extent that they are not available to people—and the legal aid that they were there to replace is not itself replaced, there is no provision.

Q 108

Ben Wallace: I think you said earlier that early disclosure—early sharing—is very important in clinical negligence cases. Would you be supportive of the NHS Litigation Authority being compelled to share reports, etc., much earlier in cases where one could try and resolve things before getting to court or further down the line?

Linda Lee:  One of the Jackson proposals was that there should be earlier sharing of evidence. That has improved but it still does not address the basic problem referred to by Claire, which is that causation issues are very complex. That is where you have real difficulty in assessing whether a claim is going to be successful and also the value of the claim.

Claire Fazan:  May I give one small example? Often where an adverse incident has occurred—something unexpected has happened and there has been a hospital inquiry—at an early stage I may get a report from the trust, which has carried out an investigation, and it may well say that there were failings in care. The problem is that I have to be able to show that intervention, when they say it should have been intervention, would have been in time to avoid this devastating injury for the individual and the family. That is not something that is going to be investigated as part of the treatment of my client. It is not necessary for the treatment and so it is an investigation that happens only due to litigation. In litigation we exchange reports very early on. Thanks to cases that have been cited over the years, we now have this sharing of information. Our litigation system for clinical negligence is a very efficient system.

Q 109

Andy Slaughter: My first question is to Linda Lee, although the others may want to answer. We consider the Bill, particularly the parts on legal aid, to be essentially a cost-cutting measure without a view to the social costs or access to justice. I think I am right in saying that the Law Society said in evidence that it believes that the cost to the public purse will be higher—in other words, there will be increased costs. Can you explain that?

Linda Lee:  It is quite simple. We should have early intervention. Citizens Advice and others have produced figures on actual downstream costs. All the proposals will not make the problem go away. What they will mean is that the problem is not dealt with at an early stage by lawyers—possibly not lawyers; we are possibly talking about not-for-profit agencies—trying to resolve matters. This is not all about solicitors. That early help will not be available, so what happens to those people and to that problem? Do their children end up in care? Are there costs to society? All those problems will happen. We very much feel that you are simply shunting the cost away from the legal aid budget to somewhere else. The cost will be greater. Studies and the Government’s own impact assessment suggest that that will be the case. It is so obvious that I cannot think of what else to say.

Peter Lodder:  May I put it into the slightly narrower context of family breakdown? In the midst of a family breakdown, in most cases, there are children. One parent is not going to have custody of those children. Often, when these cases come to court and lawyers are involved, the parent who looks least likely to get custody of the children will be told in no uncertain terms, “You’re not going to get them and, what’s more, fighting it out in the courts is likely to make the situation worse.”
People are not always at their most receptive at times of stress, but they do eventually listen to what is said and many cases are, in fact, settled without the need to go to court. Plenty of evidence supports that—for example, the Council of HM Circuit Judges has given clear evidence on that. If these people are representing themselves, there will be no sensible whisper in their ear. In fact, what they will do is go into court where things will be said—one against the other—that make the situation more, rather than less difficult, and on it goes. The person who feels that they should have custody of the children will not get it and will feel that it is a question of fighting harder and longer. That is what they will do. You will clog up the courts, just as I said earlier and just as many other authorities have said.

Claire Fazan:  May I add one other thing to that in the context of clinical negligence? In all the cases in which legal aid certificates have been granted and there has been a pre-action investigation, it is recognised by the Legal Services Commission and I think the MOJ, as well as its being reflected in my practice and that of others, that about 50%—or slightly more—of those cases are not pursued at the end of the investigation. That is because lawyers are taking a view that it is not a case with reasonable prospects of success. If they fall out of the legal aid scheme, those are precisely the cases that people will be struggling on their own with. They will be clogging up the courts, whereas at the moment they are not.

Peter Lodder:  I should have referred to the family justice review, which is being conducted under David Norgrove. It has recently produced an interim report that speaks specifically about the value of legal advice at an early stage to avoid protracted hearings.

Deborah Turner:  In the context of family breakdown, I understand that mediations are conducted with the mediator not giving advice. They must not give advice. They can give legal information, but not advice. They are confident that there is the availability of sensible legal advice for their clients. Mediators would feel extremely uneasy about conducting mediations in other circumstances. It is very important for those clients to be able to go and take their legal advice and to know that the decision they come to is sensible and legal.

Q 110

Andy Slaughter: May I pursue a point with Deborah Turner? I think that all parties would agree that mediation if possible is better than an adversarial solution. However, in looking at these proposals and the costs involved, do you feel, first, that there are an adequate number of properly trained mediators? Secondly, in dealing with all situations without the back-up of litigation, including where there is an inequality between the parties, do you feel that you might be being set up to fail because so much is being put on to mediators to resolve matters?

Deborah Turner:  Family mediators are extremely concerned about these proposals, yes. We can see huge pressures on mediators, not least the expectations of clients who have not had the legal advice that is so vital, as was said earlier. The big risk is that they will come to mediation expecting the mediator to be able to solve all the problems, to tell them what to do, to write it all up. Mediators are not trained to do that, nor should they be.

Andy Slaughter: One final question, for Claire Fazan principally, about what the landscape is going to be in clinical negligence if all the provisions of this Bill go through. We have heard about the double whammy of removing legal aid from scope and the changes to CFAs. I do not know if you undertake both, but if you had one of the types of cases you talked to us about—for instance, parents coming to you with a catastrophically injured child—how would you advise them if the provisions of this Bill go through, and how do you think your practice will change in the light of that?

Claire Fazan:  There is another big question because there were recommendations in Lord Jackson’s report, which could have a major impact on how these reforms may affect this field of work. It involves qualified one-way cost shifting. Until we know what is happening there, it is very difficult to know the answer to your question. As I understood it, his proposal was that, generally, the defendant’s costs would not be paid by a losing claimant except in qualified circumstances. At the beginning of the case, I have to tell my client, “I don’t know what these qualified circumstances are going to be and whether they’re going to affect you.” The prudent claimant and prudent lawyer will say, “You need to take out after-the-event insurance.” We do not know what the after-the-event insurance market is going to be in this brave new world, whether, in fact, it is going to exist, or whether it is a commercial market that can last.
One answer to your question is partly that I do not know. The second answer is that I will have to take view, based on my case load, of whether this is another case to which I can risk exposing my firm and my staff, or whether I am simply going to have to say, “I’m sorry, I’ve got too much exposure at the moment, you’re going to have to go to somebody else.” The danger is that somebody else will say the same, and so we have an ever-reducing access to justice for these people. It is not through not wanting to help them.

Linda Lee:  May I add a small point?

Jim Sheridan: Very briefly because other people are indicating that they want to speak.

Linda Lee:  My point is about the particular difficulty of clinical negligence. The proposals are for a 10% uplift on general damages, which will pay for the success element from the client, rather than from anywhere else. That will be capped at 25%. There are particular difficulties with clinical negligence, because general damages are uncertain in personal injury cases for the most part but particularly uncertain in clinical negligence, because you are talking about an exacerbation of an injury rather than a pure injury. When you are assessing the risk at the outset and trying to work out how much money your client will get as an uplift, and where the 25% cap will be, it will be impossible. It will be far harder than in a road traffic case. If you look at the Jackson figures, where it is suggested that most claimants will benefit, if you take out the simple road traffic cases, most claimants will not benefit and they will receive less than 100% compensation. It is important that clinical negligence is seen in that context.

Q 111

Tom Brake: I want to return briefly to mediation, and whether your respective organisations have any proposals for how mediation could be strengthened, enhanced or made more relevant to ensure that more people are diverted from courts, or whether you think that there is precisely the right amount of mediation now and it cannot be increased in any shape or form.

Peter Lodder:  Speaking from the perspective of the Bar Council, many, many more barristers now are trained as mediators, and we do see it as a very productive and helpful way of moving forward. You may be surprised to hear that, generally speaking, we do not like litigation, and if you have got to court, something has gone wrong. So any attempt to avoid that outcome is taken, and mediation is a particularly useful way of doing it. But, as I said a short while ago in answer to one of your colleagues, mediation helps only those who really want to do it. You have got to have that mindset and there are people who do not want to compromise. There are people who want to litigate until the absolute end. In those circumstances, frankly it does not matter how keen you are on mediation or how many mediators you train. Those people will pursue their case.

Q 112

Tom Brake: Is that process of training barristers in mediation complete, or is that an ongoing programme whereby you are seeing more people trained in mediation and therefore they can offer more mediation than is the case currently?

Peter Lodder:  Absolutely—it is ongoing. Mediation is undoubtedly a very good way of resolving conflict. By way of simple example, I recently went to Calcutta on behalf of the Bar Council. We have been supporting a mediation scheme there in commercial disputes and mediation is becoming much more widespread. So we absolutely encourage it in all areas of law.

Linda Lee:  I just want to add that mediation is not new. I qualified in 1994 and that was about the time when everybody started offering training schemes, because mediation was recognised as being very useful and the Law Society has had accredited mediators for a very long time. So it is an ongoing programme and we all support the concept of mediation and its use in the right place. But there is not a magic formula and I think that Deborah would agree that we cannot make every case settle through mediation. Some cases cannot be settled in that way.

Q 113

Tom Brake: No, I am asking you whether you have plans, as it seems the Bar Council has, to expand the level of mediation training to be able to deal with more cases through mediation.

Linda Lee:  We can cope with as many people who want to train to be mediators as required, because that training system has been in place for a long time. However, it is not the case that we can magically produce a cohort of mediators who will resolve these issues. They will not be resolved in that way.

Q 114

Tom Brake: So, in your view there is no way in which more mediation could be progressive?

Linda Lee:  There are always ways in which there can be more mediation. That depends on the willingness of the parties and also that somebody is willing to pay for the mediation. There is a cost to mediation; it is not free. Probably the limit at the moment on the number of mediators is the amount of mediation that is available to do, but that does not mean that you will resolve more cases by mediation. I think that there is probably an over-supply of mediators for the current level of work. I would be interested to know what Deborah thinks.

Jim Sheridan: Order. Could I just mediate now, in the sense that we have very limited time left and we want to move on?

Q 115

Alex Cunningham: I want to return to where we started in Committee, with vulnerable people. The panel of witnesses has made it very clear this afternoon that the Government’s proposals to withdraw legal aid for some of the poorest and most vulnerable people will be quite disastrous for those people, for example the mother who loses her children because she cannot afford to fight for them, or the father who cannot get access to his children for the same reason. What changes should we be making in Committee to this Bill to avoid that disaster?

Peter Lodder:  You should restore the proposals to take, for example, family issues out of scope; you should restore a proper definition of domestic violence; you should restore a facility by which people who have suffered injury through no fault of their own can get representation so that they can have proper compensation; and you should restore a system that means that the compensation they get is the compensation that the court has assessed that they need. Those are the sorts of things that you need to do and we are very happy to provide amendments to help you do that, but the fact is that this Bill gives with one hand and takes away with two.

Alex Cunningham: A direct answer to a direct question. Thank you.

Q 116

Damian Hinds: I want to return to international benchmarking, because it has been a very important part of the wider debate on this subject. Figures have been cited in Parliament suggesting that there is a huge gap between legal aid costs in this country and those in some other countries, including comparable countries with similar legal traditions. I know that you will probably dispute that and say that it is not a direct like-for-like comparison and so on, but even after you allow for all that, it seems that there is still quite a sizeable gap.
So my question to the panel of witnesses is, “What do you believe are the drivers of that gap?” Linda, earlier you seemed to suggest that, in the case of New Zealand, rurality and a small population were drivers of the difference. Forgive me if I say that that sounds like a counter-intuitive response, because those are usually considered drivers of higher rather than lower per capita costs. So I was wondering whether you stick by that, or whether you think that there might be other drivers in differences of costs between countries?

Linda Lee:  I believe that in New Zealand as well there are increased court costs. You are not comparing like-for-like situations. If you want us to do a full analysis on that we are happy to do so, but you are also looking at different levels of criminality, with different percentages of population convicted of crime. I was interrupted when I mentioned France. In this country almost double the amount per 100,000 of people are convicted of crimes as in France. I do not know the social reasons for that but if you drill down into the detail you find considerable differences.

Q 117

Damian Hinds: If we can just stick with countries that are broadly comparable in terms of the legal traditions, so exclude France for the moment, what do you think are the key drivers of differences in per capita cost of legal aid between countries which, even after you made the adjustments you mentioned, would indicate that this country is still a particularly high-cost country per capita?

Peter Lodder:  The countries you are talking about as being similar I assume are Canada, New Zealand and Australia. I do not think anybody would suggest that the social set-up in any of those countries is comparable with this country in terms of the levels of crime, social-deprivation and the needs of society. There are significant differences.

Q 118

Damian Hinds: What are the main differences?

Peter Lodder:  In New Zealand they have a very low population and they do not have, for example, a Moss Side and they do not have serial killers as we do.

Q 119

Damian Hinds: But how much of the legal aid bill is serial killers and Moss Side?

Peter Lodder:  These are aspects that impact on how much you spend. Can I take you to something else? You moved away rather sharply from the comparatives that were being used by the Government with other European countries. One of the reasons why the Government have stopped using those comparators is because the Council of Europe has said that our legal aid costs are average in Europe. Let us compare European countries, as they are more like us than New Zealand. Also, the Legal Action Group in this country—not a lobbyist for lawyers—has said our costs are average for Europe. That is their finding and their research. I have not seen any research which goes into the detail of this to the same degree on the Government’s side in the way the Council of Europe does or the Legal Action Group. [Interruption.]

Jim Sheridan: Order. We are close to running out of time, and this issue has had a particularly good hearing. If you could provide an analysis of comparison countries—other European countries—that would be extremely helpful.

Q 120

Helen Goodman: I want to go back to the questions about private family law. I would like to ask Deborah Turner in particular a question as she briefly mentioned the fact that in cases of mediation quite frequently one party has more money than another. Do you think that withdrawing legal aid so that people come without the benefit of advice will particularly disadvantage women and children as opposed to men?

Deborah Turner:  It is very often the wife who is legally aided and so the answer to your question is yes, there is a big risk.

Q 121

Helen Goodman: That being the case, what would the risks be to women and children as opposed to men?

Deborah Turner:  The risks are particularly in financial cases. Very often the wife—particularly the wife without her own income—has not had much financial experience. She does not understand how the finances work. It is part of a mediator’s professional duty to make sure that she does understand it, but she very much needs the back-up of sensible legal advice to tell her what is in her best interests, which a mediator cannot do. That is extremely important. A mediator can tell her the legal information, but they cannot advise her as to her best interests.

Q 122

Helen Goodman: Do you think the Bill could be amended to ensure that litigants in person, in private family law cases, are not able to cross-examine either children or other adults whom they are alleged to have abused?

Peter Lodder:  I do not see how you can do that because who is going to ask the questions? In every case, there are questions to be asked, so that evidence can be contradicted and evidence that suggests that an allegation being made is false can be considered. But if you cannot ask questions of a witness because the only person available is the person who is accused—

Jim Sheridan: Order. We have now come to the end of the time allotted for this session. On behalf of the Committee, I thank all the witnesses for coming along. We now move on to oral evidence from the Director of Public Prosecutions.

Examination of Witness

Keir Starmer gave evidence.

Jim Sheridan: May I welcome the next witness, the Director of Public Prosecutions? Just for the record, could you introduce yourself?

Keir Starmer:  Keir Starmer, Director of Public Prosecutions.

Jim Sheridan: At this stage, I remind colleagues of the previous comment I made about straying outside the remit of the Committee, despite what is going on outside.

Q 123

Andy Slaughter: You have taken my first six questions away, Chair, but I will persevere. Mr Starmer, clause 12 of the Bill, which was a surprise to some of us when it arrived, allows the Lord Chancellor to apply a means and merits test and possibly other tests as well to the provision of legal advice on arrest. We understand that the Minister has said that there are no plans to use that, but the fact is that the measure will be in the Bill if it is enacted. Do you have any concerns about clause 12 and the possible uses of it?

Keir Starmer:  I obviously have an overall concern to ensure that the requirements of a fair trial are complied with. They stretch back to the point of arrest. But the operation of clause 12 is probably something better put to the Ministry of Justice or the Legal Services Commission. My concern is that there should be fairness in the proceedings and that whatever is necessary should be put in place to that effect.

Q 124

Andy Slaughter: Obviously, what is of concern to us—you might or might not want to comment on this—is that you will have situations going back to pre-PACE, less enlightened times where individuals charged with offences that are serious or at least of consequence to them will not have the benefit of legal advice on arrest. Is that something that gives you concern?

Keir Starmer:  I would rather not get into the detail of that because that is for others. But, as a matter of principle, I am concerned that there should be full, fair trial rights afforded to all those in criminal proceedings, and that stretches back to the point of arrest. I do have that concern, but the detail is for other people.

Q 125

Andy Slaughter: I shall ask you another point of principle and then I will leave you to my colleagues and perhaps come back if there is time. Part 1 of the Bill deals with very significant scope changes to legal aid. The impact assessment to the Bill concedes that that will be detrimental to social cohesion and is likely to increase crime. As you probably heard in our last session, it will also mean that victims can be cross-examined by perpetrators without the benefit of representation. Have you looked at the scope changes and do you have any concerns from your point of view?

Keir Starmer:  I am afraid the honest answer to that is that the extent to which I have looked at the provisions that do not directly impact on me or the CPS is limited. I obviously listened to the questions and answers that were just given and I know the general provisions and concerns of the debate that is going on, but I will not pretend that I have tried to delve into the detail of predominantly civil issues that do not directly affect me or the CPS.

Q 126

Andy Slaughter: One more question if I may. There is quite a significant increase in out-of-court disposals in the Bill. We heard interesting evidence this morning of a substantial variation between police areas as to the percentage. That can vary between 33% and 66% of criminal offences being dealt with, and at least one chief constable has said that they thought only 20% of offences should get into court. Do you have any concerns in relation to that, whether there may be a move away from judicial towards administrative determination?

Keir Starmer:  I think that out-of-court disposals, if that is the right description, have an important part to play in criminal proceedings. They are invaluable for first-time offenders and young offenders and, properly used, they are an important part of our criminal justice system. The difficulty, as I see it, is where they are used inconsistently. There is evidence in various reports of that. That is why I have long argued that they should be part of our system, but that there should be a coherent, consistent scheme, and a stepped scheme, for out-of-court disposals. What I have in mind is a scheme that provides this level of disposal for this type of criminality, this disposal for the next level of criminality, etc., until there is a clear threshold for cases then going into court.
My own preference is to set the threshold according to the criminal conduct, not according to the statistics. In other words, I do not seek to argue that x% ought to go into court, or stay out of court. I would seek to argue that above a certain level of criminality, save in exceptional cases, the case ought to go to court. That is precisely the guidance that I put in place for the area of out-of-court disposals that I am predominantly responsible for, conditional cautions, so that when it gets to a certain level of violence, the case becomes ineligible for an out-of-court disposal and must go to court. My own view is that it is not helpful to say that 25% ought to go to court, or should not go to court. It is actually, what is the threshold?

Jim Sheridan: Order. We have very limited time in this session and a number of people have indicated, so brevity both in questions and answers would be helpful.

Q 127

Ben Wallace: Welcome to the Committee. The previous witness from the Law Society put together an alternative funding package, saying that a lot of the measures in the Bill would not be necessary because we could raise money elsewhere to find savings or funding. The biggest chunk of their proposals—£79 million—was that the CPS, which you are responsible for, should pay for all judge-directed acquittals and dropped prosecutions at court. What is your view of that, and if you did have to find £79 million, what would you have to do vis-à-vis your administration of justice?

Keir Starmer:  I did not hear that, but I would quarrel with it. I have seen it in the figures. The problem with their analysis is that the number of cases that have failed that are attributable to the prosecution is x%. Within that, are all the cases where the prosecution witness does not turn up. We run quite extensive witness care units. We do our level best to get witnesses to court, but where they do not turn up, to then say the prosecution must pay the cost is, in our view, unfair and counter to the way in which criminal justice ought to be administered. I am all for driving out inefficiencies in the criminal justice system, and within our organisation. I do not think that particular proposal achieves that end. All that will happen, because costs are paid out of central funds at the moment, is moving it between one pot and another. It would be better to require me to improve performance across the board, and that is a challenge that I take up and what I am endeavouring to do.

Q 128

Ben Wallace: What is your total budget?

Keir Starmer:  The precise figure I do not know off the top of my head, but it is about £650 million.

Q 129

Jim Sheridan: Can you drop us a note?

Keir Starmer:  Yes. We can give you the precise figure.

Q 130

Helen Goodman: The Government are proposing to change the way bail operates and replace the long list of reasons that magistrates and judges can use to remand people to prison with a no prospects test. I am sure you have thought about how you are going to advise the courts. Could you tell us how you plan to advise them on these issues and what you think the impact of the provision might be?

Keir Starmer:  I understand the rationale behind the provision. When it was first suggested, we had a number of concerns, because the purpose of the bail regime is to prevent offending, prevent interference with witnesses and ensure people attend at court. The first two of these are important. We were particularly concerned about situations, such as domestic violence, where it is sometimes important to use the bail provisions to deal with them. To some extent, the way in which it is now presented has allayed the fears that we had in relation to that, because there are now provisions, as you will know, in relation to the likelihood of offences, essentially within the domestic setting. Where we had a concern it has now broadly been dealt with.
There are other concerns, such as the court having to go through a mini-sentencing exercise at the outset to assess what sentence it might impose. That is a concern that, frankly, I think we and the courts will rise to and meet. Some low-level concerns remain but nothing in principle.

Q 131

Helen Goodman: If you think that is a low-level issue, what do you think the impact will be on attendance at court, and if you think that the level of non-attendance will increase, are you content for people to be tried in absentia?

Keir Starmer:  You could be arrested for breach of bail and brought to court and that ought to be the first option if somebody does not turn up. I would much prefer that to trial in absentia. Beyond that, I have not seen any evidence to suggest that this is going to lead to a number of people not attending at court.

Q 132

Helen Goodman: Can one infer that magistrates concerned about using remand to prison are worrying unnecessarily at the moment?

Keir Starmer:  No, I do not think that is necessarily right. The scheme is to deal with the three purposes that I have suggested. Where it is low-level offending, and unlikely realistically to have a custodial sentence, in the vast majority of cases those people will be on bail under the current system in any event. We are talking about very small numbers. Of far greater concern to us was the issue of offending while on bail, in the particular circumstances that I have described, and that has been mitigated by the Bill.

Q 133

Robert Buckland: Mr Starmer, you have dealt with the question of the costs element. Can you clarify for me that there is, in fact, already a provision, which has been around for many years, for wasted costs to be paid where there has been improper, negligent or unreasonable behaviour on the part of the prosecution?

Keir Starmer:  That has been around for years. It is exercised by judges on occasions when they think our behaviour in particular has fallen below the standard required.

Q 134

Robert Buckland: Thank you. May I move on to the part of the Bill that I know you have been paying close attention to, in particular clause 54, “Duty to give reasons for and to explain the effect of sentence”. It may not be apparent to every member of the Committee, but the CPS does have a role, and exercises this role very diligently, in writing to victims of crime to inform them about the outcome of cases. In particularly serious cases, there will even be meetings with victims of crime to discuss with them any concerns they may have. What is your view about the potential impact of proposed new section 174? Do you think it will make the job of caseworkers and CPS lawyers easier in putting together letters explaining sentences to victims of crime?

Keir Starmer:  Yes, I do and we welcome it. Anything that clarifies the process in court and simplifies it so that people can understand it is to be welcomed. It seems to me that if the steps that are set out are gone through by the court it makes it much easier for those in court, and those who have to be informed afterwards, to know what has gone on.

Q 135

Kate Green: I should like to ask about the Government’s proposed new offence in relation to knife crime. As a prosecutor, have you seen the need for this new offence to be created? This is in relation to an offence of threatening with an offensive weapon or an article with a blade or point and creating a risk of serious physical harm.

Keir Starmer:  The position as far as I am concerned is as follows. The conduct that is created as an offence has long been criminal conduct and we have not experienced difficulties in bringing prosecutions for that conduct. In a sense, nothing is added by the creation of an offence that covers existing criminal conduct. As far as the penalty is concerned, both the sentencing guidelines and the case law have suggested that the ranges set out in the Bill are right for these sorts of offence. Therefore, to some extent, the Bill is reflecting what is already sentencing practice.

Q 136

Kate Green: But this will now be a mandatory sentence. Do you have any concerns about that?

Keir Starmer:  I think it is mandatory but with some opportunity to take into account particular circumstances, which are not dissimilar to the circumstances that the sentencing guidelines and the courts have already suggested ought to be taken into account. There is a rigidity that was not in the sentencing guidelines, but there is no evidence to suggest that there was a problem with bringing charges in relation to this conduct or that there was a problem in the application of the guidelines as they were. No doubt this will clarify the position, but I am not sure there was an evidential base.

Q 137

Kate Green: In fact, the clause adds very little to what was already there—if, indeed, it adds anything.

Keir Starmer:  I have not seen anything to suggest that there was a problem in either the conduct or the sentencing in this particular area.

Q 138

Helen Goodman: I should like to go back to the issue of out of court disposals. You said that you were concerned about inconsistency in their use by different police forces. Do you think that the reduction in the involvement of the CPS will increase that inconsistency?

Keir Starmer:  Not necessarily. If we look at cases, it allows us to try to inject some consistency. One of the things we have done is to make sure that all our out of court disposals are put on a website quarter by quarter for each of our areas, so that people can see whether we are being consistent. It is really a matter of agreeing with the police the approach and the thresholds that will bring the consistency. I am not in favour of saying that only the CPS can bring consistency and the police cannot. We have to work with the police to bring that consistency. But where the police can charge an individual, it makes sense to give them the power to suspend that charging decision, which is effectively what it is, and to allow them to conditionally caution.

Q 139

Helen Goodman: What do you think the appropriate instrument for agreeing that with the police might be?

Keir Starmer:  As I understand it, there is further work to be done on the overall scheme for out of court disposals. That is not within the Bill. We intend to play our part in that. What is required is a coherent framework. This is not critical of the police or anybody else, but the framework we have is one that everybody has inherited because it has been a piecemeal development. That was understandable. We now need a scheme that is much more consistent and coherent. But I do not think that the Bill is intended to achieve that; that is a separate piece of work.

Q 140

Andy Slaughter: We are promised a new clause on the law of self-defence in relation to residential burglary in the autumn. Do you feel the need for either a change or a clarification of the law on that or do you think it is sufficiently clear at the moment?

Keir Starmer:  My own view is that there is no need for a change in the law. I have no difficulty with clarifying a perfectly good law.

Jim Sheridan: Order. That brings us to the end of this question time. Thank you very much for coming along. I am sure that it has been a busy day for you.
We will now hear oral evidence from the Legal Services Commission.

Examination of Witnesses

Carolyn Downs gave evidence.

Jim Sheridan: Thank you very much for coming along and for your patience. For the record, could I ask you to introduce yourself?

Carolyn Downs:  I am Carolyn Downs and I am chief executive of the Legal Services Commission.

Q 141

Robert Buckland: It is good to see you again. I will ask you a question that I think that I have asked you before in my capacity as a member of the Select Committee on Justice. I know that you came in towards the latter end of the LSC’s lifetime, shall I say? I will not make any further comment.
I think that we all agree that the tendering process involving the family law contracts last year was a debacle, and we know that the result was defeat for the LSC in the High Court. What lessons have been learned from that particular episode, and how will the new Executive agency pick up the baton and ensure that that sort of scenario is not repeated?

Carolyn Downs:  To put that in context, last year the LSC let more than 5,000 contracts on both civil and crime, and the one contract that was not let was the family contract. Regarding the lessons learned, I have commissioned a report. I get external people to do that and look at the issues around implementation, the making of policy, consultation and procurement. It is important to inform the Committee that during the last six months, we have defended 64 judicial reviews on our tendering process, of which just one was lost, and that was an issue of public law. In every instance of procurement law, we won those judicial reviews. That points, therefore, to the fact that when one undertakes consultation and the process of developing policy, that is the point at which we really needed to strengthen our processes.
We are currently out to consultation on the family tender, which we are now having to undertake because we extended the contract, effectively, and we have to undertake a new one. We are in the process of consultation. The discussions that we have had to date with the representative bodies, all of which were here earlier, have been extremely positive and the feedback that we have got from representative bodies to date is positive, even with those representative bodies accepting a reduced consultation time scale for us to undertake that work.
So there are some key issues for me: one is how you formulate policy; and the second is the time scales for implementation. An important lesson for us in the commission is how you project manage and programme manage those processes, because the programme and project management within the commission was not as strong as it should have been to see that through.

Q 142

Robert Buckland: You are confident that that will be translated into the new arrangements in the Bill?

Carolyn Downs:  We will have let that contract by February next year, in advance of any transition to Executive agency status. Following scope changes, we will need to tender the other civil contracts, save mental health, and we would anticipate doing those as the new Executive agency. Obviously we will have to take that whole process through into the Ministry of Justice.

Q 143

Yvonne Fovargue: What percentage of positive outcomes are recorded for legal aid and social welfare law cases?

Carolyn Downs:  I do not have that statistic with me—I am sorry.

Q 144

Yvonne Fovargue: Could you let us know?

Carolyn Downs:  I can let you know, absolutely.

Q 145

Yvonne Fovargue: I know that you collect a tremendous amount of statistics. Could you tell us the categories of clients that will lose access to justice if social welfare law is taken out of scope?

Carolyn Downs:  Obviously, those people who access social welfare law—housing and employment advice—will lose access completely.

Q 146

Yvonne Fovargue: Could you tell us if those specific groups are women or people with disabilities? Would they be disproportionately represented?

Carolyn Downs:  That is a matter really for the MOJ and its equality impact study, which it published as a part of the response to consultation and the original Green Paper. The information shows the equality assessment of its legislation.

Q 147

Yvonne Fovargue: But you collect statistics on the number of people with disabilities, females and so on, who access the categories of law?

Carolyn Downs:  Those statistics are largely collected by providers, but we have provided what information we have to the Ministry for it to publish in its impact assessments.

Q 148

Yvonne Fovargue: You have that information then. The providers submit it to you because they have to in order to get the audit.

Carolyn Downs:  They have to submit the eligibility of their clients. I will provide you with what information we can—no problem.

Q 149

Elfyn Llwyd: You are shortly to become an Executive agency of the MOJ. Do you believe that the Bill protects you in terms of being independent of the Government in your decisions to grant legal aid? Have you taken external advice on this issue and have you consulted anybody about it?

Carolyn Downs:  I think that the issue for consultation regarding the abolition of the Legal Services Commission and independent decision making is a matter for the Ministry. However, obviously, it is a matter that the commissioners have been careful to consider and that they have, indeed, covered in their response to the Government in relation to this.
There are two issues to raise. First, the level of independence in some respects is strengthened by the Bill in clause 4. Currently, on exceptional funding cases, the Lord Chancellor makes all the decisions. Clause 4 precludes the Lord Chancellor from making those decisions and pushes everything to the statutory office holder. On the issue surrounding the independence of the statutory office holder, we were very keen, in discussion with the Ministry, to ensure that they are protected from any political interference. We were concerned about that when the Green Paper came out and we felt comforted by the Bill’s provisions around the independence of decision making. I am clear that it will be important for us to look at the guidance that the Lord Chancellor gives to the statutory office holder in the future about what can and cannot be funded and how clear that guidance is.
Secondly, if I were the statutory office holder, I would be keen to ensure that the independent panels of solicitors and barristers whom we currently have and who deal with appeals against the decisions of executives in the Legal Services Commission remain in place. They can give that extra level of independence and uphold or, indeed, overturn the decisions of the statutory office holder. We are very keen to ensure that that independence remains in place.

Q 150

Elfyn Llwyd: Have you made any inquiries about whether those panels will remain in place?

Carolyn Downs:  I have had numerous conversations with the Ministry of Justice about that and have said that that is my absolute preference.

Q 151

Elfyn Llwyd: Have you had a response?

Carolyn Downs:  I think it is considering that.

Jim Sheridan: I again appeal for brevity from those asking the questions and those giving the answers.

Q 152

Michael Crockart: My question is about the practical implications of the change from arm’s length public body to Executive agency. Have you had any investigations about the potential for savings that there might be in transferring the Legal Services Commission to the MOJ? Have there been any investigations as to whether your systems and processes are compatible?

Carolyn Downs:  In terms of the savings that arise from the move across to the Ministry of Justice, we have identified £8.5 million-worth of savings that will come through effectively shared corporate services. I have worked well with the Ministry of Justice about the corporate services that will need to report directly to myself as chief executive, and will therefore be somewhat more independent, and those that will be in the central core of the Ministry of Justice. We have identified £8.5 million-worth of savings, largely from staff savings arising from that.
On top of that, there will be savings to the Ministry but not to the Exchequer in relation to the VAT status. Believe it or not, at the moment the Legal Services Commission pays considerable VAT moneys simply for another part of the MOJ to provide a service on our behalf.
In relation to systems, we have a new civil case management system, which we will be introducing next year, and we are ensuring that it is put on the same IT platform—an Oracle business suite—as the MOJ’s. We outsourced the production of our accounts in the course of the last year; they are being done by Liberata, the same people who do the MOJ’s core accounts. We are doing everything that we can to ensure compatibility.

Q 153

Michael Crockart: I get the strong impression that you feel that this is a positive move for your organisation.

Carolyn Downs:  I see few disadvantages with the move. I believe that my commissioners would wish to see security around the independence of decision making; as long as that was intact, they would not have any real issues.

Q 154

Alex Cunningham: Previous witnesses have condemned the cuts to legal aid for the most vulnerable and the poor. Are such cuts the right ones? If not, should they be made elsewhere and, if so, where else could they be made, or do you think that the cuts are so severe that they do not serve justice?

Carolyn Downs:  I really think that that is a policy matter for the Ministry of Justice, not for me. My responsibility is to administer and implement cuts decided by Government, and not to comment on the appropriateness of their policy.

Q 155

Alex Cunningham: Will your commissioners be able to serve justice with the budgets they will have to operate with in future?

Carolyn Downs:  The commissioners will not exist, but the legal services agency will have a responsibility to deliver what the Government have requested it to do, post the Bill being passed one way or the other. My responsibility as chief executive will be to ensure that the appropriate resources are put in the right place to ensure that that delivery is undertaken, and that is what I am doing currently.

Q 156

Alex Cunningham: Bearing in mind what the Government are asking you to do, do you believe that having had the cuts imposed you will be able to deliver that?

Carolyn Downs:  I see no reason why not. If you take a whole area of legal aid out of scope, it simply reduces the amount of work that the Legal Services Commission has to do.

Q 157

Alex Cunningham: But you are not going to say whether it is right or wrong?

Carolyn Downs:  It is not my role to say whether it is right or wrong.

Q 158

Andy Slaughter: On a related point, I was just looking at your response to the Green Paper. The annex to that raises practical issues and concerns you had. It is admirably brief but I should like to ask you to amplify one or two of those points.
You say, on provider sustainability, that
“we have concerns that fee cuts may result in market failure and premature exits from the market where, for example, a firm or Not for Profit organisation becomes insolvent.”
From your knowledge of the market, do you think that is a serious concern? As well as the fee cuts, will it be affected by the scope changes?

Carolyn Downs:  The issue around market sustainability is not one or the other; on civil, it is also about the single gateway. It is the impact of the three different budget reductions in relation to the single gateway, the fee reductions and the changes in scope. The area where we have had some concerns is about the large reductions in scope and the ability of certain parts of the legal services market to adapt to that, particularly the not for profit sector, which the Government absolutely accept in their impact assessments, and in the immigration and asylum field.

Q 159

Andy Slaughter: You anticipate my next question. You say on the viability of not for profit sector:
“We have noted that these may be particularly threatened by the changes proposed, as these will coincide with funding reductions being made elsewhere…We believe the Government should look at the funding of NfP organisations collectively by the public sector to ensure that these valuable advice agencies are maintained at an appropriate level.”
Have you had any response from the Government as yet that they will be considering that?

Carolyn Downs:  Yes. I think that that is being positively dealt with by the Ministry of Justice, and the Cabinet Office has said that it will undertake a review to consider the wider impacts of advice across the sector—the wider and more general advice across the piece rather than legal work.

Q 160

Andy Slaughter: The problem is that before the Bill goes through, we have immediate local authority cuts. Law centres in west London—I represent Paddington law centre—could close tomorrow. You obviously have a clear concern that an important part of the provider market is going. Are you able to put a greater sense of urgency into this, as there may not be much to support by the time the reviews have been completed?

Carolyn Downs:  That area of work, in terms of taking forward policy in relation to the advice sector more widely, is definitely a matter for the Ministry, and the Cabinet Office is taking the lead on that. It might be helpful for me to give you some statistics. At the moment, on civil, whether it is not for profit or solicitors, we have 3,370 providers. On crime we have 2,000 providers. Last year, 6% left the civil market, and 0.6% of them quoted as their reason for leaving “reform to the legal aid system”. On crime, the figure was higher; 9% left the market and 1% quoted legal aid reform as the reason. The point that I want to make is that we have a lot of providers.

Jim Sheridan: I remind Mr Slaughter that his colleague is waiting to ask a question.

Q 161

Andy Slaughter: Changes are happening this year and next year, not last year. You also say that
“experience in recent years has shown that working to unrealistic timescales has increased risks and resulted in poorer outcomes, as well as putting those most closely involved under considerable pressure.”
You note that “rushed implementation” may have to be halted, for example if there is a successful judicial review. Are you not concerned at the speed with which the changes are going through?

Carolyn Downs:  We have had considerable discussions with the Ministry about the speed of change and the implementation, and continue to do so. I have raised concerns. We have extended the time scale on family tenders. We will not be implementing new family contracts in November, but in February, because the Ministry has taken on board the concerns that we had about the speed of that implementation and therefore the potential success of judicial review, if we did it one way or another. I am satisfied that the conversations that we are having with the Ministry, where we are raising real risks to implementation, are being taken on board.

Q 162

Kate Green: I am also interested in learning some lessons from your experience of managing the market. As you will know, in the past people have presented with clusters of problems in different categories of social welfare law. Clearly, as we strip most categories out of the ambit of legal aid, the possibility of dealing with those groups of problems will be removed. When you say that in the past a very small percentage of providers left the market as a result of legal aid changes, what is your view on the likely scale of departure from the market when whole categories of social welfare law are removed and therefore the capacity for the remaining providers to deal holistically with people’s problems?

Carolyn Downs:  I do think that there will be an impact on the not for profit sector, particularly in social welfare law, without a doubt, and on their ability to adapt to a contracting environment and fixed-fee regimes. That is a risk. I feel, however, that we will have sufficient providers to be able to give a service.
You will be aware of the Immigration Advisory Service going into administration last week. I was concerned about coverage issues in relation to the IAS. I have been in discussion with the administrators over the past few days and we have a huge number of people contacting us who are prepared to take on that work. That is an immediate example where I was very concerned about whether we would be able to get coverage in non-urban areas in particular. It would appear from the contact that we are getting from external providers that they would be prepared to take on that work.

Q 163

Kate Green: Do you think, when whole categories of law can no longer be covered and there will therefore be dividing lines where legal advice can or cannot be provided in a single case or with a single client, that that is the most cost-effective and best-value way to support that client, looking at the cost to the public purse in the round?

Carolyn Downs:  As you know, last year the Legal Services Commission tried to group many of its contracts and categories of law together on the basis that an overwhelming number of clients present with a multiplicity of issues, and that was how we undertook our contracting last year. With the family contracts that we are undertaking now we are not insisting that people do private and public family law; we are allowing people to do either one or the other because of the impending changes.

Jim Sheridan: Order. We have unfortunately run out of time.

Ordered, That further consideration be now adjourned. —(Jeremy Wright.)
5.40 pm

Adjourned till Thursday 14 July at Nine o’clock.